LESSON 1

OPERATION MANAGEMENT
- The science and art ensuring that goods and services are created and delivered successfully
to customers.

William Procter, co-founder of Procter & Gamble.

1. Efficiency, a measure of how well resources are used in creating outputs.
2. Quality, of the goods and services that create customer satisfaction all contribute to
profitability and ultimately the long-run success of a company
3. Costs are minimized when managers strive to reach zero defects in the organization. The
four major types of quality costs are prevention, appraisal, internal failure, and external failure.

WHAT OPERATION MANAGERS DO?

●​ Forecasting: predict the future demand for raw materials, finished goods, and services.
●​ Supply chain management: manage the flow of materials, information, people, and
money from suppliers to customers.
●​ Facility layout and design: determine the best configuration of machines, storage,
offices, and departments to provide the highest levels of efficiency and customer
satisfaction.
●​ : use technology to improve productivity and respond faster to customers. Technology
selection
●​ Quality management: ensure that goods, services, and processes will meet customer
expectations and requirements.
●​ Resource and capacity management: ensure that the right amount of resources (labor,
equipment, materials, and information) is available when needed.
●​ Process design: select the right equipment, information, and work methods to produce
high-quality goods and services efficiently.
●​ Job design: decide the best way to assign people to work tasks and job responsibilities.
●​ Service encounter design: determine the best types of interactions between service
providers and customers, and how to recover from service upsets.
●​ Scheduling: determine when resources such as employees and equipment should be
assigned to work.
●​ Sustainability: decide the best way to manage the risks associated with products and
operations to preserve resources for future generation.

UNDERSTANDING GOOD AND SERVICES

Good is a physical product that you can see, touch, or possibly consume. Examples of goods
include cell phones, appliances, food, flowers, soap, airplanes, furniture, coal, lumber, personal
computers, paper, and industrial machines.
Service is any primary or complementary activity that does not directly produce a physical
product.

DIFFERENCE BETWEEN GOODS AND SERVICES?

- Good are tangible, Services are intangible
- Customers participate in many services processes, activities and transactions
- The demand for services is more difficult to predict that the demand for goods.
- Service cannot be stored as physical inventory.
- Service management skills are paramount to a successful service encounter
- Patent do not protect services

CUSTOMER BENEFITS PACKAGE (CBP)

* Set of tangible and intangible feature that the customer recognize, pays for, uses, or
experiences.
• primary good or service is the "core" offering that attracts customers and responds to their
basic needs.
* Peripheral goods or services are those that are not essential to the primary good or service,
but enhance it.
• Variant is a CBP attribute that departs from the standard CBP and is normally location- or
firm-specific.

LESSON 2

kodak
the demand for traditional film plummeted rapidly. Kodak's film sales declined sharply, leading to
massive layoffs and financial struggles, suddenly shifted to a digital cameras and smartphones
with high quality cameras became mainstream.
xerox
long know as paper copy machines has reinvented itself and branched out into new but risky
business services, including commercial information technology, document outsourcing, finance
etc.

Competitive Advantage
A firm ability to achieve market and financial superiority over its competitors.
- Management must understand customer needs and expectation and how value chain can best
meet
these through design and delivery of attractive customer benefits package.
- Management must build and leverage operational capabilities to support the desire competitive
Priorities.

customer wants and needs

Fundamental purpose of an organization is to provide goods and services of value to
customers.
Operational Segments
Behavior, Geography, Demographic, Sales Volume, Profitability, Customer Benefits Package,
Competitive Strategies, Process
Order qualifier - basic customer expectation are generally consider the minimum performance
level required to stay in the business.
Order winners- are goods and services features and performance characteristic that
differentiate one customer benefit package from one another and win the customers business.

Evaluating Goods and Services

Search attributes- are those that a customer can determine prior to purchasing the goods and
services.
Experience attributes- are those that can be discerned only after purchase or during
consumption or use.
Credence attributes- are any aspect of good and service that the customer must believe in but
cannot personally evaluate even after purchase and consumption.

Competitive Priorities
represent the strategic emphasis that a firm places on certain performance measures and
operational capabilities within a value chain.

Five key competitive priorities:

1. Cost
2. Quality
3. Time
4. Flexibility
5. Innovation

Strategy
is a pattern of plan that integrates an organization’s major goals, policies and action sequences
into a cohesive whole.
Strategic planning
is a process of determining long term goals, policies, and plan for organization.
Operation Strategy
an operations strategy is the set of decision across the value chain that support the
implementation of higher-level business strategy

1. Produce a well defined set of products in a fairly stable market as a low cost leader.
2. Provide high product variety and customization in turbulent market that requires innovation
design to meet customer-specific requirements.

LESSON 3

STEP 1&2. STRATEGIC MISSION ANALYSIS, AND COMPETITIVE PRIORITIES.

STEP. 3 CUSTOMER BENEFITS PACKAGE AND CONFIGURATION.

- TIME
- PLACE
- INFORMATION.
- ENTERTAINMENT
- EXCHANGE
- FORM
STEP. 4 DETAILED GOODS, SERVICES, AND PROCESS DESIGN.
●​ Prototype an original model on which something is patterned.
TYPES OF DESIGN PROTOTYPES
●​ Paper prototypes involve sketches or hand-drawn layouts of the interface on paper,
allowing for quick ideation and feedback gathering.
●​ Low-fidelity They provide more functionality than paper prototypes but are not as
detailed as high-fidelity ones.
●​ Mid-fidelity prototypes to incorporate more details and functionality without reaching
the complexity of high-fidelity designs.
●​ high-fidelity prototypes are more polished and detailed. They closely resemble the final
product in appearance and functionality, often created using design software.

STEP. 5 MARKET INTRODUCTION/DEPLOYMENT.

STEP 6. MARKET EVALUATION.

CUSTOMER FOCUS DESIGN

-VOICE OF THE CUSTOMER-CUSTOMER REQUIREMENTS, AS EXPRESS IN THE
CUSTOMER'S OWN WORDS.
- QUALITY FUNCTION DEPLOYMENT (QFD)-IS AN APPROACH TO GUIDE THE DESIGN,
CREATION, AND MARKETING OF GOODS AND SERVICES BY INTEGRATING THE VOICES
OF THE CUSTOMER INTO ALL DECISIONS.

RELIABILITY IS THE PROBABILITY THAT MANUFACTURE GOODS, PIECES OF

EQUIPMENTS, OR SYSTEM PERFORMS ITS INTENDED FUNCTION FOR A STATE PERIOD
OF TIME UNDER SPECIFIED OPERATING CONDITIONS

DESIGN MANUFACTURABILITY-IS THE PROCESS OF DESIGNING A PRODUCT AT THE

HIGHEST LEVEL OF QUALITY

PRODUCT SIMPLICITY-IS THE PROCESS OF TRYING TO SIMPLIFY DESIGN TO KEDUCE

COMPLEXITY AND COST AND THUS IMPROVE PRODUCTIVITY, QUALITY, FLEXIBILITY
AND CUSTOMER SATISFACTION.

SERVICE DELIVERY DESIGN-INCLUDES FACILITY LOCATION AND LAYOUT, THE

SERVICESCAPE, SERVICE PROCESS AND JOB DESIGN, AND TECHNOLOGY AND
INFORMATION SUPPORT SYSTEM.

SERVICESCAPE- IS A PHYSICAL EVIDENCE A CUSTOMER MIGHT USE TO FORM AN

IMPRESSION, IT ALSO PROVIDES THE BEHAVIORAL SETTING WHERE SERVICE
ENCOUNTER TAKE PLACE.
3 DIMENSIONS:
1. AMBIENT CONDITION
2. SPATIAL LAYOUT AND FUNCTIONALITY.
3. SIGN, SYMBOLS, AND ARTIFACTS.

SERVICE PROCESS DESIGN-IS AN ACTIVITY DEVELOPING AN EFFICIENT SEQUENCE

OF ACTIVITIES TO SATISFY BITH INTERNAL AND EXTERNAL CUSTOMER
REQUIREMENTS.

SERVICE ENCOUNTER DESIGN-FOCUS ON THE INTERACTION, DIRECTLY, OR

INDIRECTLY, BETWEEN SERVICE PROVIDER(S) AND CUSTOMER

PRINCIPAL ELEMENTS OF SERVICE ENCOUNTER DESIGN:

1.CUSTOMER CONTACT BEHAVIOR AND SKILLS
2. SERVICE PROVIDER ELECTION, DEVELOPMENT AND EMPOWERMENT.
3. RECOGNITION AND REWARD.
4. SERVICE RECOVERY AND GUARANTEES.

1. CUSTOMER CONTACT BEHAVIOR AND SKILLS

CUSTOMER CONTACT-REFER TO PHYSICAL OR VIRTUAL PRESENCE OF THE
CUSTOMER IN THE SERVICE DELIVERY SYSTEM DURING SERVICE EXPERIENCE.

CUSTOMER CONTACT REQUIREMENTS ARE MEASURABLE PERFORMANCE LEVELS OR

EXPECTATIONS THAT DEFINE THE QUALITY OF OF CUSTOMER CONTACT WITH
REPRESENTATIVES OF AN ORGANIZATION.

2. SERVICE PROVIDER SELECTION, DEVELOPMENT AND EMPOWERMENT

EMPOWERMENT MEANS GIVING PEOPLE AUTHORITY TO MAKE DECISION BASED ON
WHAT THEY FEEL IS RISH, TO HAVE CONTROL OVER THEIR WORK, TO TAKE RISK AND
LEARN FROM MISTAKE, AND PROMOTE CHANGE

3. RECOGNITION AND REWARD.

4. SERVICE GUARANTEES AND RECOVERY.

SERVICE UPSET-IS ANY PROBLEM A CUSTOMER HAS REAL OR PERCEIVED, WITH
SERVICE DELIVERY SYSTEM AND INCLUDES TERM SUCH SERVICE FAILURE, ERROR,
MISTAKE, AND CRES

SERVICE GUARANTEE-IS A PROMISE TO REWARD AND COMPENSATE A CUSTOMER IF

A SERVICE UPSET OCCURS DURING SERVICE EXPERIENCE

SERVICE RECOVERY IS A PROCESS OF CORRECTING A SERVICE UPSET AND

SATISFYING THE CUSTOMER
LESSON 4

TECHNOLOGY AND OPERATIONS MANAGEMENT

Characteristic of Technology
Hard Technology -refers to equipment and devices that perform a variety of task in the creation
and delivery of goods and services. (Pencil grip. Computer, Equipment Technology
Soft technology- refers to application of internet, computer software and information system to
provide data, information, analysis, and to facilitate the creation and delivery of goods and
services.
Computer-integrated Manufacturing System (CIMSs) represent the union of hardware,
software, database management, and communication to automate and control production
activities, from planning and design to manufacturing and distribution.

Key elements of a CIM system include:

Product Design: Utilizes CAD software to create digital prototypes and validate designs before
production.

Process Planning: Involves CAM software to generate tool paths, select cutting tools, and
optimize machining parameters for CNC machines.

Production Control: Manages manufacturing operations in real-time, monitors machine status,

and adjusts production schedules based on demand fluctuations.

Quality Assurance: Integrates quality control measures, inspection processes, and feedback
loops to ensure product consistency and compliance with industry standards.

Inventory Management: Optimizes inventory levels, tracks raw materials, and manages supply
chain logistics to minimize stockouts and reduce carrying cost

Maintenance and Repair: Implements predictive maintenance strategies, schedules equipment

repairs, and monitors asset performance to maximize uptime and prolong equipment lifespan.

Human-Machine Interface (HMI): Provides operators with intuitive interfaces to control

machines, production metrics, and troubleshoot issues in real-time.

Data Integration and Analytics: Integrates data from various sources, performs advanced
analytics, and generates actionable insights to optimize production efficiency and reduce
operational costs.

Robot- a programmable machine design to handle materials or tools in the performance of a

variety of task. (Manufacturing Robots, foods robots)
E-Service - Refer to using internet and technology to provide services that creates and deliver
time, place, information, entertainment, and exchange value to customer and support the sale
off goods.

Customer Relationship Management ((CRM)- is a business strategy designed to learn

customer’s needs, wants and behaviours in order to build customer relationship and loyalty,
ultimately enhance revenue and profits.

LESSON 5

PROCESS CHOICE DECISION

Custom, or make to order, goods and services-are generally produced and delivered as
one of a kind or in small quantities, and are designed to meet specific customers'
satisfaction

Option, or assemble to order, goods and services-are configuration of standard parts,

subassemblies, or services that that can be selected by customers from a limited set.

Standard, or make to stock, goods and services-are made according fixed design, ang
the customer has no options from which to choose.

FOUR PRINCIPAL TYPES OF PROCESS ARE USED TO PRODUCE GOODS AND

SERVICES.

1. Project-are large scale customized initiatives that consist of many smaller tasks and
activities that must be coordinated and completed to finish on time and within budget.

2. Job shop process are organized around particular types of general purpose equipment
that are flexible and capable of customizing work for individual customers.

3. Continues flow process- create highly standardized goods or services, usually around
the clock in very high volume.

4. flow shop processes- are organized around the fixed sequence of activities and
process steps, such as assembly line, to produce a limited variety of similar goods and
services.

PRODUCT LIFE CYCLE

is characterization of product growth, maturity and decline over time

Product life cycle consist of four phases:

●​ Introduction
 ●​ Growth
●​ Maturity
●​ Decline and Turnaround

PROCESS DESIGN

4 Hierarchical Level
Task is a specific unit of work required to create an output
Activity is a group of task needed to create and deliver an intermediate or final output
Process
Value chain